Respiratory syncytial virus (RSV) infection is the major cause of bronchiolitis in young children. The factors that contribute to the increased propensity of RSV-induced distal airway disease compared with other commonly encountered respiratory viruses remain unclear. Here, we identified the RSV-encoded nonstructural 2 (NS2) protein as a viral genetic determinant for initiating RSV-induced distal airway obstruction. Infection of human cartilaginous airway epithelium (HAE) and a hamster model of disease with recombinant respiratory viruses revealed that NS2 promotes shedding of infected epithelial cells, resulting in two consequences of virus infection. First, epithelial cell shedding accelerated the reduction of virus titers, presumably by clearing virus-infected cells from airway mucosa. Second, epithelial cells shedding into the narrow-diameter bronchiolar airway lumens resulted in rapid accumulation of detached, pleomorphic epithelial cells, leading to acute distal airway obstruction. Together, these data indicate that RSV infection of the airway epithelium, via the action of NS2, promotes epithelial cell shedding, which not only accelerates viral clearance but also contributes to acute obstruction of the distal airways. Our results identify RSV NS2 as a contributing factor for the enhanced propensity of RSV to cause severe airway disease in young children and suggest NS2 as a potential therapeutic target for reducing the severity of distal airway disease.